What kind of people use check-cashing places? How do they work? Do such places contribute to inequality?
And most important — why are people paying for their own money?
In their video “Checkmate,” the Internets Celebrities, a.k.a. Dallas Penn and Rafi Kam, explore these questions and eventually, in their words, “make it rain.”
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People use check cashing places because most banks now charge non-account holders to cash checks. Bank of America charges $5, regardless of the size of the check. If both the bank and check cashing place charge you $5, you’ll go to the check cashing place because it’s more convenient.
If some business maverick came in with a new chain of check cashing shops at half the rate of current shops, they would probably do well. Capture the market. We would likely see a price war, which would be good for the consumer.
It’s the Wal-Mart way. Except nobody would shed a tear when the high-priced check cashing shop owners went out of business.
The Coinstar thing is a little tangential.
Those check cashing places are exploitative, and most of the exploiting gets done in disadvantaged communities. What’s so bad about being morally outrage at this? When did morality become a detestable quality? Perhaps the capitalist economy has no moral obligation, but the government does. Sometimes economic interests are trumped by societal interests. I think this case — where economic practices work to keep the poor and disadvantaged parts of society poor and disadvantaged — falls into that category.
Check cashing instead of banks … renting instead of owning … convenience stores instead of supermarkets … It’s quite expensive to be poor, and it’s hard to get ahead of that vicious cycle.
If we got rid of check cashing places by legislation, that would only hurt the people we’re trying to help (with the well-meaning but misguided compassion of bourgeois White America). Those check cashing places are the only game in town not because they drove out traditional banks through competition, but because traditional banks don’t want to be in those neighborhoods. Check cashing places are indeed a ripoff, but removing them without replacing them would only make matters worse for the residents of those neighborhoods.
Reading these comments is hilarious. You folks have no idea about the struggle on the lower rungs of the economic ladder. Might want to look in the mirror instead of pointing fingers. I mow yards on the side, and I’m just as likely to get nickel and dimmed and cheated by people with Texans for Obama stickers on their big, fat S.U.V.’s than the by W sticker lot. I who have a bank account will still use a check cashing place instead of depositing a check in the bank and waiting 24-48 hours before I can use the money. Hope I’m not “distasteful” to you.
If people want to be outraged about the abuse of the poor they would outlaw lotteries and sin taxes.
These two things squeeze more money of of poor neighborhoods than check cashing operations could only dream of.
The part about escaping the world of check-cashing fees and arriving into the world of ATM fees is just pure genius…
J
Most of the people I’ve known who use check cashing places don’t have a bank account because of overdraft fees. Having a negative balance at one bank also makes it harder to get another account elsewhere, so they have little choice but to use check cashing places or pay the similar fees at banks for cashing checks. I think that check cashing places provide a valuable service.
Coinstar machines are a “scam” in the sense that every bank I’ve ever been to counts your change for free–without even the need for an account. On the other hand, I suppose banks aren’t open 24 hours.